Housing Market: Why Record Low Mortgage Rates Aren’t Helping
For the second time in as many weeks, the fixed mortgage rates in the United States plunged lower than ever before.
Freddie Mac’s latest Primary Mortgage Market Survey revealed that the average 30-year fixed rate hit an all-time low mark of 3.36 percent, and for the first time since October 15, 2009, rates for 15-year fixed loans dropped below those for 5-year adjustable rate mortgages.
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However, despite the record lows, a spike in the housing market is not expected. A sluggish U.S. economy – which watched its GDP growth rate slip to 1.3 percent in the second quarter – is likely to thwart any improvements in the real estate sector.
Stagnant personal income levels and a 2.6 percent drop in pending home sales are additional indicators that the low mortgage rates still haven’t boosted the housing market as much as economists might hope.
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